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Why the Coventry Group (ASX:CYG) share price is up 10% today

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The Coventry Group Ltd (ASX:CYG) share price is up 9.59%% at the time of writing to 80 cents. This came after the company released a quarterly update for the September quarter. 

What was in the announcement?

Coventry Group announced sales growth of 7.7% in the September quarter 2020 when compared to the September quarter 2019. Total sales for the period were $68.3 million. 

The company reported that sales of its fluid systems were up 12.7% in Q1 FY2021 when compared to Q1 FY2020. According to the company, this was due to its strong value proposition along with activity in key market sectors and diversification into new markets. Coventry Group received a large order for its fluid systems in September of $8 million from a major mining and resources client. The company expects this large order to have a positive effect on its half year results.

According to Coventry Group, sales from its trade distribution business were up 4.8% in the September quarter of 2020 when compared to the prior corresponding period. The company reported that all business units in trade distribution posted a positive contribution to results for the September 2020 quarter.

According to the company, COVID-19 has had a minimal impact on its business, with the exception of lock downs in New Zealand. Coventry Group reported that all business units are fully operational, apart from four Konnect branches in metropolitan Melbourne which are affected by lockdowns and have some customer constraints in store.

Coventry Group reported that it had net assets of $104.1 million at 30 September and is targeting completion of the acquisition of industrial hose and associated equipment supplier, HIS Hose, on 1 December 2020.

The company advised that the markets in which its fluid systems and trade distribution businesses operate have been reasonably resilient during the COVID-19 pandemic. Furthermore, it expects its businesses to benefit from additional government stimulus measures and for economic growth to rebound.

About the Coventry Group share price

Coventry Group is a supplier of industrial products to the mining, construction and manufacturing sectors. It has been listed on the ASX since 1966.

The Coventry Group share price is up 73.91% since its 52-week low of 46 cents, however, it has fallen 24.53% since the beginning of the year. The Coventry Group share price is down 26.61% since this time last year.

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